Since the 2012-13 financial year, local authorities, fire authorities, and Police and Crime Commissioners have been required to determine whether the amount of council tax they plan to raise is ‘excessive’.

A set of principles defined by the Secretary of State, and approved by the House of Commons, is used by authorities to decide if the amount to be raised is excessive. Any authority proposing an excessive increase in council tax must hold a local referendum and obtain a ‘yes’ vote before implementing the increase. An authority proposing an excessive increase must also make substitute calculations, based on a non-excessive council tax level. This takes effect if the excessive increase is rejected in the referendum.

Thresholds for the 2019-20 financial year were finalised on 5 February 2019. Authorities must raise council tax by less than the threshold to avoid a referendum.

In 2019-20, the thresholds will be 3% or £5.00 on a band D bill for district councils; 3% for fire and rescue authorities and the GLA; and £24 on a band D bill for Police and Crime Commissioners. Local authorities with social care responsibilities (county and unitary authorities) faced a total threshold of 5%. Of this, 2% is available for adult social care and 3% for general spending. As in previous years, no principles were applied to parish and town councils.

In addition to the above, an additional 2% threshold is available to Northamptonshire County Council following the severe financial problems that it experienced during 2018.